EFF to Shine Light on Tax Avoidance

The Economic Freedom Fighters (EFF) seek to table a private member’s bill in parliament designed to tackle tax avoidance in South Africa.

The explanatory summary of the Draft Anti-Avoidance of Tax Bill was published in Government Gazette 41957 for comment.

The proposed legislation was drawn up by Floyd Shivambu, an EFF member of parliament.

The EFF holds the view that transnational corporations are “continuously planning and engaging in aggressive tax avoidance that is costing the country billions of rands in tax revenue”.

However, very few tax avoidance cases have ended up in court as the “current tax laws are outdated and do not account for the fact that the difference between illegal tax evasion and legal tax avoidance is more blurred than ever due to current economic policies and the financialization of the world economy”.

According to the EFF, the difference between illegal tax evasion and legal tax avoidance must be clearly outlined.

The draft bill aims to replace the General Anti-Avoidance Rule set out in sections 80A to 80L of the Income Tax Act of 1962 with that contained in the draft bill.

Other objectives include instructing the South African Revenue Service to intervene against aggressive tax avoidance schemes, eliminate legal loop holes and introduce strong penalty regimes for companies that participate in aggressive tax avoidance schemes.

Comment on the proposed content of the draft bill is invited within 30 days of the date of publication.